Philex sees potential for second porphyry (October 15, 2001)

Vancouver — Philippine copper porphyry deposits typically occur in clusters and partners Philex Gold (PGI-V) and Anglo American (AAUK-Q) are hoping that the region around their new Boyongan prospect is no exception.

While outlining the promising find on the North property, the latest drill hole hit 39 metres of mineralized debris flow some 800 metres south of the discovery hole.

“We are encouraged by the debris flow of mineralized diorite porphyry encountered in (hole) 30, indicating the possible presence of another porphyry system in the general area,” says Philex’s CEO, Gerard Brimo.

Based on the latest results, the partners are pushing for the approval of its exploration permit covering ground staked by the joint venture immediately west and south of the current mineral production sharing agreement (MPSA). An MPSA is a mining agreement between the government and a “qualified entity” — usually a company or a syndicate — wherein the latter is granted the right to explore, develop and utilize any minerals discovered in the contract area for a period of 25 years; it is renewable for another 25 years. This permit must be held 60% by Philippine interests. The exploration permit grants the holder the right to explore a permit area for two years, allows 100% foreign ownership, and is renewable.

Boyongan is in eastern Mindanao, where all the previously discovered copper porphyry deposits occur as clusters farther to the south. The companies are defining a large body of oxide and primary copper-gold mineralization that is covered by later-stage volcanics. Typically, the mineralized district is part of a north-northwest-striking belt of pre-Miocene arc basement that has been severely fractured by multiple splays of the major Philippine fault system. Miocene quartz diorite stocks and later subvolcanic andesite porphyries invade late Cretaceous and lower Tertiary rocks. Many of these mineralized intrusions are structurally controlled, occurring along major high- angle faults.

Mineralization occurs along intensely fractured roofs of the intrusion and is often restricted to its contact with the upper Cretaceous volcanics and sediments. The five largest known copper porphyries in the area average 69 million tonnes grading 0.45% copper and 0.4 gram gold.

The only known deposit in the region to have a considerable oxide zone is the Kingking deposit, which hosts 438 million tonnes grading 0.34% copper and 0.51 gram gold. Of that, 87.6 million tonnes grading 0.48% copper and 0.74 gram gold are oxide-hosted. Metallurgical test work pegged the recoveries for the oxide mineralization at 70% for gold and 80% for copper.

The latest results tabled by Anglo American indicate that the higher-grade Boyongan mineralization remains open at depth to the northwest.

Collared from the same site as hole 20 (which cut 394 metres grading 0.77% copper and 1.51 grams gold from 92 metres down-hole) and drilled to the north, hole 21 cut the mineralized body at 87 metres down-hole through to the end of the hole at 478 metres. The base of the oxidation was hit at 338 metres down-hole. This hole returned 187 metres grading 0.41% copper and 0.45 gram gold from 291 metres.

Hole 22 was drilled to the north from the same site as hole 16, which had intersected 378 metres grading 0.64% copper and 0.46 gram gold from 184 metres down-hole. The new hole cut 85 metres grading 0.2% copper and 0.17 gram gold from 250 metres.

Hole 23, collared 20 metres north of the discovery hole (which ran 0.81% copper and 1.9 grams gold over 365 metres) was drilled vertically and returned 311 metres grading 0.47% copper and 1.13 grams- gold from 64 metres.

Some 150 metres to the southwest, hole 24 was drilled to the north at a 60 angle. The oxide zone was encountered from 135 to 763 metres down-hole, before entering primary mineralization through to the bottom of the hole at 1,001 metres. This hole returned 567 metres grading 0.42% copper and 0.68 gram gold from 135 metres, followed by 164 metres grading 0.35% copper and 0.48 gram gold from 837 metres.

Drilled northward from a collar 200 metres south of hole 12 (97 metres grading 0.28% copper and 0.68 gram gold), hole 25 cut 149 metres averaging 0.37% copper and 0.16 gram gold.

Hole 26 was collared 450 metres north of previously abandoned hole 8 and drilled to the south. This hole cut 71 metres grading 0.28% copper and 0.29 gram gold from 451 metres down-hole.

Three rigs are currently testing the zone to the south and one rig is turning to the north. Hole 27 is being drilled in the northerly direction 150 metres south of hole 10 (345 metres grading 0.5% copper and 0.7 gram gold). This hole cut oxide mineralization from 101 to 260 metres down-hole before entering primary sulphides down to its current depth of 560 metres.

Hole 28 was collared at the same site as hole 24 is and being drilled to the west. The hole cut the mineralized diorite breccia at 204 metres through to its current depth at 600 metres.

Hole 29 was collared 800 metres northwest of hole 6 and is being drilled northward. The hole cut weakly mineralized diorite porphyry at 338 metres down-hole to its current depth at 500 metres.

Hole 30 is being drilled vertically some 800 metres south of hole 6. This hole hit major debris-flow volcanic rocks, from 52 to 91 metres down-hole, comprising diorite breccia with quartz-magnetite-chalcopyrite clasts that are interpreted as being derived from a separate porphyry system. From 177 metres to its current depth of 200 metres, the hole encountered sandstones and siltstones.

Anglo American can earn 40% of the North property by spending $2.2 million, and a further 30% by completing a bankable feasibility study.